Masiyiwa upbeat about Econet offshoot

Econet Wireless founder Strive Masiyiwa says spinning off Cassava Smartech from the telecoms business will attract a different type of investor to the ones who have traditionally invested in the telecoms sector.

BY BUSINESS CORRESPONDENT

Writing on his Facebook page, Masiyiwa said there were many investors who were no longer interested in telecoms as a sector, but were looking for African technology businesses active in the new economic models such as Fintech.

“By separating Cassava, which houses our fast-growth technology businesses such as Fintech and ride hailing platforms, you are definitely going to see a new group of investors taking an interest,” he said.

Cassava Smartech is the first listing of scale to emerge in the African Fintech space. M-PESA in Kenya has been considering separating from Safaricom for years, but has yet to do so.

“There are a lot of investors in the Fintech space that are not part of the traditional fund managers,” Masiyiwa said.

“We have been receiving calls from the type of organisations that one does not normally hear from.

“These include family offices and impact investment funds that are focused on things like financial inclusion.”

He said this would not be the first or last time that telecoms companies have spun off assets to create new types of businesses.

“When some telecoms companies like Bharti Airtel decided to spin off and sell their towers, a lot of people in the industry were totally horrified, asking how could they split out something so strategic,” Masiyiwa wrote.

“But in reality it made sense. Others soon followed and today there are very few companies that have kept their towers.

“The spinning-off of Cassava will allow the company to shake off the constraints created by the need to follow the telecoms business narrower agenda.”